Zimbabwe Softens Stance Towards Foreign-owned Shops

The government of Zimbabwe seems to have softened its stance of prosecuting foreigners who operate retail businesses reserved for indigenous people. The government did not implement an earlier demand that foreign-owned business shut down on January 1.

I am in the streets of Harare where restaurants, pharmacies, auto parts shops and other retail businesses operate. They are mainly foreign-owned. Since January, shop owners have been jittery after the government asked all foreign-owned retailers to shut down to make way for black Zimbabweans.

In this particular area most of the shop owners are Nigerian. This man we shall call “Ude” is one of the owners worried about the demand to close all foreign-owned shops.

He says rather than close foreign-owned stores, the government needs to encourage native Zimbabweans to enter the retail sector.

“The whole Zimbabwe, it sounds as if 75 percent of the retail shops across the cities are run by Nigerians, but we are actually involved in very insignificant numbers which will not make any significant economic contribution, even to the indigenization which is proposed,” said Ude.

Zimbabwe introduced an “indigenization” law in 2007 which stipulates that foreign businesses must cede 51 percent control to black Zimbabweans.

But last year the government said it wanted blacks to have absolute control. It gave shops owned by foreign businessmen until January 1 to close down.

I asked Zimbabwe’s indigenization minister whether the government had changed its position, given that these shops still operate.

“A number of companies have come forward and they want to comply. All they wanted was full information and what it means. And clarify what we mean as indigenous people and that has been clarified. I am happy to say, a lot of companies that come to know that such laws exist within their own countries. The major thrust is that we are going to indigenize and empower people,” he said.

Since the start of of indigenization, analysts have called on President Robert Mugabe’s government to shelve it, arguing that it scares away investors.

The government has refused to back down, saying the policy is meant to help black Zimbabweans who were disadvantaged by British colonialism.

The country’s major mining companies seem to have complied, but whether the retail shops will do the same is an open question.